A former American Realty Capital Properties Inc. chief financial officer was arrested and charged with helping orchestrate an accounting fraud that caused a $4 billion drop in the firm’s market value in 2014.

Brian Block was arrested at his home in Hatfield, Pennsylvania, Thursday morning. He and former chief accounting officer Lisa McAlister are accused of overstating American Realty’s income by more than $12 million. Block faces as long as 20 years in prison if convicted of the most serious charges against him.

McAlister pleaded guilty in June and is cooperating with the government, according to a statement from Manhattan U.S. Attorney Preet Bharara. Both Block and McAlister were sued Thursday by the SEC. American Realty was a publicly traded real estate investment trust, or REIT, which is now known as Vereit Inc.

Block is charged with conspiracy and securities fraud and making false filings with the U.S. Securities and Exchange Commission.

“These charges against Brian Block are entirely unwarranted," Reid Weingarten, an attorney for Block, said in a statement. "We are very disappointed that the government, after a two-year investigation, has decided to charge Brian. He is completely innocent and will be exonerated in court.”

Parke Chapman, a spokesman with the firm Rubenstein, said Vereit declined to comment on the case.

Prosecutors claim American Realty, like other REITs, reported income using a measure called adjusted funds from operations, or AFFO, which reflects income without considering non-cash depreciation and amortization expenses and excludes some one-time expenses. Firms use AFFO in addition to more traditional Generally Accepted Accounting Principles, according to the government.

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Prosecutors claim an unnamed American Realty employee told Block, McAlister and others in the company in 2014 that its method of calculating AFFO contained an error that led it to report inflated income in the first quarter of 2014 and in earlier financial periods. According to the government, Block and McAlister continued to use the mistaken AFFO calculation in reporting second-quarter earnings, falsely letting shareholders believe that earnings were in line with analyst expectations.

Disclosure of the accounting errors later in 2014 triggered the sharp stock drop and the departures of executives including Chairman Nicholas Schorsch and Chief Executive Officer David Kay.

Vereit, whose name combines the Latin word for truth, veritas, with REIT, owns more than 4,200 retail, restaurant, office and industrial properties in 49 states, the District of Columbia, Puerto Rico and Canada, the company said in a statement last month. Vereit-owned properties have a combined book value of $17.4 billion.

The criminal case is U.S. v. Block, 16-cr-00595, U.S. District Court, Southern District of New York (Manhattan). The SEC case is Securities and Exchange Commission v. Block, 16-cv-07003, U.S. District Court, Southern District of New York (Manhattan).